Alternative Fee Arrangements - The Time Has Finally Come

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Seismic shift!  Transformational change!  The end of lawyers!  Death of the billable hour!  Power to the clients! 

With all of the changes in the legal profession today, perhaps more than any other issue, the current conversation revolves around the use of alternative fee arrangements (AFAs).  Are we truly on the brink of a tsunami about to break over the legal profession — with irrevocable changes?  Or are we at the leading edge of a developing dynamic in the legal profession whose resulting change is unclear?

What is clear, even to the casual observer, is the rapidly burgeoning interest in alternative fee arrangements among clients and in particular general counsel.  We see a growing, probably permanent change to the value proposition between clients and firms. Its magnitude and pace will be determined by competitive pressures from clients as well as competitive responses by law firms. 

New law firms are springing up, founded on the premise of alternative fee arrangements and a new and different value proposition.  The degree to which these “disrupters” may hasten change may be very high.  As clients become accustomed to new value-driven fee arrangements, they will see greater and greater benefits including cost management and predictability.  Once AFAs are in place, we see no obvious reason or rationale for a return to the billable hour.

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